The board of Merian Chrysalis Investment Company has proposed a placing of equity at £1.48 per share in efforts to raise £50m to fund new investments, with the company allowing retail investors the opportunity to invest alongside institutional buyers via primarybid.com.
If £50m is raised, the placing shares would represent around 10% of the Merian Global Investors-advised company's existing issued ordinary share capital.
Co-managed by small and mid-cap managers Richard Watts and Nick Williamson, the trust invests primarily in later-stage private companies.
In September last year, Merian Chrysalis aimed to raise more than £100m though ordinary share issuance, having seen its shares trade at a premium since its launch.
In a London Stock Exchange statement today (28 September), the board explained that "due to recent investments", the trust "is now substantially fully invested", meaning it needs to raise cash to invest in "numerous opportunities fed into its pipeline".
One opportunity "in particular" outlined by the board said it "would like to pursue immediately".
The board expects the "investment quantum" of the target to be £30m to £50m, and it is therefore "prudent to raise some extra capital to provide follow-on optionality and funding for other pipeline investments".
It said the target "displays many of the key attributes" that Merian looks for, such as its disruptive technology capabilities, significant growth, attractive recurring revenue streams, and a "strong and well-respected" management team.
In addition, Merian Chrysalis's board revealed it is in discussions with lenders regarding a potential revolving credit facility (RCF), which would be used to "provide flexibility for making future investments".
The trust currently has a gearing limit of 20% of its net asset value, and the board said while it does not intend the RCF to "provide permanent gearing", an RCF is a "prudent measure that will allow flexibility around future investments and fundraises".
Application will be made for the placing shares to be admitted to the premium listing segment of the Official List of the Financial Conduct Authority and to be admitted to trading on the premium segment of the Main Market of London Stock Exchange.
Admission and settlement of the placing shares is expected to take place on or before 8am on 9 October.
The PrimaryBid Offer, via the PrimaryBid.com platform, is open to retail investors until 3pm on 6 October 2020. The PrimaryBid Offer is subject to a "first come, first served" basis and may close early if it is oversubscribed.
The board of Merian Chrysalis said: "The company highly values its retail investor base which has supported the company alongside institutional investors since launch.
"Given the longstanding support of retail shareholders, the company believes that it is appropriate to provide retail and other interested investors the opportunity to participate in the PrimaryBid Offer.
"The company is therefore making the PrimaryBid Offer available exclusively through PrimaryBid.com platform."